Tag Archives: mortgage bonds

Brexit happened and mortgage Bonds, thus mortgage rates, reacted delivering a great opportunity to homeowners and homebuyers. But what the heck is Brexit and what does it have to do with mortgage rates?

What is Brexit?

Brexit is a term coined from the withdrawal of Britain from the European Union – the British Exit. The people voted last night and the expectation was Britain would remain in the EU. Surprise, surprise…instead, the British walked out, withdrew from the union and … Continue reading →

Mortgage rates are often thought to be directly linked to the Federal Reserve. It’s common for many people to mistakenly think The Federal Reserve actually sets mortgage interest rates. The media contributes to this misunderstanding. But it is incorrect. Mortgage rates are based on the pricing of mortgage bonds which are collateralized by mortgages, known as mortgage-backed securities.

Mortgage interest rates are typically a hot topic for consumers in the home buying process. In fact, it is often the first question asked of a mortgage professional without consideration of market activity and the discussion of lock versus float. Even more often the mortgage rate is the only decision factor a consumer uses when choosing their home financing lender.

There are other questions and considerations a consumer should be exploring…but that’s another discussion!

Today’s consumer is feeling upbeat about the economy. Consumer sentiment surged to 98.2, above the 94.1 that was expected. This lofty level has not been seen since January 2004 and stocks soared on the news.

A spokesman from the survey said, “More consumers spontaneously cited increases in their household incomes in early January than any time in the past decade, and more households reported unprompted references to favorable employment prospects as well as lower prices than at any other time … Continue reading →

Mortgage interest rates fluctuate constantly and often with incredible volatility. Consumers typically misunderstand what causes mortgage rates to change. Most think it is the actions of the Federal Reserve and its monetary policy. However, mortgage rates are derived from the buying and selling of mortgage-backed securities which move constantly. This movement is influenced by six factors of which the Federal Reserve typically plays a minor role.

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ElizabethRoseBlogs.com is a site that provides information about housing, mortgages, and breaking economic news. The information contained on ElizabethRoseBogs site is for informational purposes only and is not an advertisement for products or services. The views and opinions expressed herein are those of the author. We are not affiliated with the US Government, US Armed Forces or Department of Veteran Affairs. This site is not connected with any government agency. This is not an advertisement to extend consumer credit as defined in Regulation Z.226.2. Consumers are encouraged to consult tax advisors, real estate attorneys, or other relevant professionals regarding their personal circumstances and state regulations.